HOUSTON--(BUSINESS WIRE)--
Ignite Restaurant Group, Inc. (NASDAQ: IRG) today announced that,
following an internal assessment of its lease accounting policies, the
Company has determined it necessary to correct non-cash related errors
related to its accounting treatment of certain leases. As a follow-up to
this review, the Company is also commencing a detailed review of its
historical accounting for fixed assets and related depreciation expense
in prior periods as a private company. Following the completion of the
accounting review, the Company, with the concurrence of its independent
registered public accounting firm, PricewaterhouseCoopers LLP, will
restate its previously issued financial statements for years 2009
through 2011 and for the first quarter of 2012.

The lease accounting errors have been preliminarily quantified by the
Company and date back to 2006, the year of the Company's origination. As
discussed below, adjustments for these errors will reflect non-cash
charges primarily relating to deferred rent.

The Company leases 100% of its properties. Historically, when accounting
for leases that included stated fixed rent increases, the Company
recognized rent expense on a straight line basis over the current lease
term with the term primarily commencing when actual rent payments began.
Additionally, the Company did not record straight line rent on leases
which contained CPI adjustments that also were subject to stated minimum
rent increases. The Company will restate its previously issued financial
statements to recognize rent expense on a straight line basis over the
effective lease term, including cancelable option periods where failure
to exercise such options would result in an economic penalty. The lease
term will commence on the date when the Company establishes effective
control over the property. Furthermore, straight line rent will be
appropriately calculated on properties with CPI adjustments that are
subject to a stated minimum required rent increase. The changes to the
recognition of rent expense are timing in nature and do not change the
total cash payments or aggregate rent expense over the effective life of
the lease term. The total amount of the increases to historical deferred
rent expense will be offset by the same aggregate amount of the
adjustments in the form of lower deferred rent expense in the future
years of the effective lives of the impacted leases.

The Company estimates that the aggregate pre-tax effect of the lease
accounting related restatement items from 2006 through the first quarter
of 2012 will range from $3.4 to $3.8 million. The non-cash charges will
impact deferred rent expense and pre-opening expense (the deferred rent
portion only). The cumulative impact of these expenses in 2006 through
2009 is estimated to be $500 to $600 thousand. The impact is higher from
2010 through the first quarter of 2012 when the Company opened 24 new or
converted units. The lease accounting restatement adjustments reduce
pre-tax income by an estimated $1.0 to $1.1 million in 2010, $1.3 to
$1.5 million in 2011 and $550 to $650 thousand in the first quarter of
2012. The estimated increases in deferred rent expense and preopening
expense will result in a corresponding increase in the deferred rent
liability.

During the fixed asset accounting review the Company will assess
historical asset additions, dispositions, useful lives and depreciation
from 2006 through the first quarter of 2012. The review will include a
store-level fixed asset inventory at all 144 restaurant locations
focusing primarily on kitchen equipment and other furniture and
fixtures. This review is likely to result in additional adjustments to
our historical financial statements. Based on the review work completed
to date, we expect the fixed asset accounting review to result in a
minimum of $1.2 million cumulative of pre-tax non-cash adjustments to
our financial statements from 2006 through the first quarter of 2012
that will negatively impact our net income during those historical
periods. Due to the scope of the review, this work will likely take
several weeks and is expected to delay the release of the Company's
second quarter earnings. While the Company is working diligently on its
fixed asset accounting review, there can be no assurance as to the
precise timing of the review or what adjustments may be necessary to the
Company's historical financial statements or which historical periods
will be impacted as a result of the review.

In connection with the restatement, the Company will also reclassify
$175 thousand of general and administrative expense from the first
quarter of 2012 into 2011. The error correction relates to professional
fees for quarterly reviews completed by the Company's independent
registered public accounting firm in 2011 that were previously recorded
in the first quarter of 2012. This reclassification will have the effect
of decreasing net income and Adjusted EBITDA in fiscal 2011 and
increasing both measures in the first quarter of 2012.

The Company's estimates for the impact of accounting adjustments are
subject to change as the Company and its independent registered public
accounting firm complete their review. The Company will make the
appropriate filings with the Securities and Exchange Commission (SEC) to
include the restated financial statements promptly following the
completion of review work by the Company and its independent registered
public accounting firm. In connection with the restatement, we are
carefully reviewing potential weaknesses or deficiencies in our internal
controls and disclosure controls and evaluating the prompt
implementation of necessary measures to remediate any such weaknesses or
deficiencies. As a result of the restatement, the financial statements
contained in the Company's prior filings with the SEC should no longer
be relied upon.

Raymond A. Blanchette, III, President and Chief Executive Officer of
Ignite Restaurant Group, stated, "We are thoroughly committed to
providing Ignite shareholders with accurate disclosure and are moving as
expeditiously as possible with full resources to quickly identify and
correct these issues. While we are extremely disappointed and
embarrassed to be in the position of having to restate our financial
results, we want to assure our investors that our operations remain
strong and our core investment thesis remains unchanged. We remain
excited about the future of the Ignite Restaurant Group and the growth
opportunities ahead for our brands. We look forward to sharing a broader
update on our progress as soon as we complete our work."

Preliminary Second Quarter 2012 Financial Update

For the second quarter ended June 18, 2012, the Company estimates
revenues to be approximately $119.9 million, an increase of 16.2%
compared to revenues of $103.2 million in the prior-year period. The
Company estimates that comparable restaurant sales increased 3.0%. This
increase marks the Company's 16th consecutive quarter of
comparable restaurant sales growth.

Restaurant-level profit margin for the second quarter is expected to be
between 19.4% and 19.7%. Restaurant-level profit for the second quarter
is estimated to be between $23.2 and $23.6 million, an increase of more
than 29% compared to the previously reported prior year period. The
prior year comparison does not include any potential impact from the
fixed asset review work that is currently underway.

The five Joe's Crab Shack restaurants developed under our new
unit prototype that have been open for more than twelve months have
estimated average sales volumes of $5.9 million over the twelve-month
period ended June 18, 2012. The Company opened five new Joe's Crab Shack
restaurants during the second quarter. Additionally, one Joe's Crab
Shack restaurant has opened in the third quarter to date.

The Company has not yet completed closing procedures for the second
quarter ended June 18, 2012 and these preliminary results are subject to
change. Due to the scope and timing of the fixed asset accounting review
noted above, the Company's second quarter earnings release and quarterly
report on Form 10-Q are expected to be delayed.

Conference Call

The Company will host a conference call to discuss the restatement today
at 5:00 PM Eastern Daylight Time. The conference call can be accessed
live over the phone by dialing 800-967-7138 or for international callers
by dialing 719-325-2180. A replay will be available one hour after the
call and can be accessed by dialing 877-870-5176 or 858-384-5517 for
international callers; the password is 2668249. The replay will be
available until July 25, 2012. The call will also be webcast live from
the Company's website at www.igniterestaurants.com
under the "Investors" section.

About Ignite Restaurant Group

Ignite Restaurant Group, Inc. owns and operates two restaurant brands,
Joe's Crab Shack and Brick House Tavern + Tap. Each brand offers a
variety of high-quality, chef-inspired food and beverages in a
distinctive, casual, high-energy atmosphere. Joe's Crab Shack and Brick
House Tavern + Tap operate in a diverse set of markets across the United
States. Joe's Crab Shack operates 127 restaurants in 33 states and Brick
House Tavern + Tap operates 16 restaurants in 9 states as of June, 18,
2012.

Non-GAAP Financial Measures and other Key Operating Metrics

This press release references non-GAAP financial measures as defined by
SEC rules, including Adjusted EBITDA and restaurant-level profit. We
think that these measures are helpful to investors in measuring our
financial performance and comparing our performance to our peers.
However, our non-GAAP financial measures may not be comparable to
similarly titled non-GAAP financial measures used by other companies.
These non-GAAP financial measures have limitations as an analytical tool
and should not be considered in isolation or as a substitute for GAAP
financial measures. We will file a Current Report on Form 8-K that will
include a more detailed description of the non-GAAP financial measures
used in this press release, together with a discussion of the usefulness
and purpose of such measures.

Our estimated restaurant-level profit margin for the second quarter
ended June 18, 2012 presented in this press release is calculated by
dividing estimated restaurant-level profit by estimated restaurant
sales. Restaurant sales represents our estimated revenue of
$119.9 million for the quarter less estimated licensing revenue not
attributable to core restaurant operations of $0.1 million for
the quarter. Restaurant-level profit represents restaurant sales of
$119.8 million less our estimated restaurant operating costs of $96.1 to
$96.5 million for the quarter. Estimated restaurant operating costs
include costs of sales, labor and benefits, occupancy expenses and other
operating expenses. Deferred rent is excluded as an expense in the
calculation of restaurant-level profit and therefore restaurant-level
profit is unaffected by the deferred rent adjustment. Our estimate of
our aggregate restaurant operating costs are preliminary in nature and
are subject to greater variability than our revenue estimates as we
complete our quarterly close process.

This press release also includes references to other key operating
metrics and performance indicators, including change in comparable
restaurant sales. Our comparable restaurant base includes restaurants
open for at least 104 weeks, or approximately 24 months. Change in
comparable restaurant sales represents the change in period-over-period
sales of the comparable restaurant base.

Forward-Looking Statements

This press release includes "forward-looking statements" within the
meaning of the federal securities laws. Forward-looking statements are
subject to known and unknown risks and uncertainties, many of which may
be beyond our control. We caution you that the forward-looking
information presented in this press release is not a guarantee of future
events, and that actual events and results may differ materially from
those made in or suggested by the forward-looking information contained
in this press release. In addition, forward-looking statements generally
can be identified by the use of forward-looking terminology such as
"may," "plan," "seek," "comfortable with," "will," "expect," "intend,"
"estimate," "anticipate," "believe" or "continue" or the negative
thereof or variations thereon or similar terminology. Examples of
forward-looking statements in this press release include the expected
impact of the restatement on our historical financial results, the
potential timing of our fixed asset accounting review, our estimated
results for the second quarter of 2012, and our timing for releasing our
second quarter earnings results and quarterly report on Form 10-Q. A
number of other important factors could cause actual events and results
to differ materially from those contained in or implied by the
forward-looking statements, including those factors discussed in our
Registration Statement on Form S-1, filed on May 8, 2012 with the SEC,
which can be found at the SEC's website www.sec.gov,
each of which is specifically incorporated into this press release. Any
forward-looking information presented herein is made only as of the date
of this press release, and we do not undertake any obligation to update
or revise any forward-looking information to reflect changes in
assumptions, the occurrence of unanticipated events, or otherwise.

As discussed above, our preliminary estimates for the impact of the
lease accounting restatement items are subject to change as we and our
independent registered public accounting firm complete our lease
accounting review. In addition, there can be no assurance as to the
precise timing of the completion of our fixed asset accounting review or
what adjustments may be necessary to the Company's historical financial
statements as a result of such review. Further, we have not yet
completed closing procedures for the second quarter ended June 18, 2012,
and our independent registered public accounting firm has not yet
reviewed the results. Accordingly, these preliminary results are subject
to change pending finalization, and actual results could differ
materially as we finalize such results.